New money laundering taskforce tackles lifeblood of organised crime
The AFP is unleashing a highly-skilled, multi-agency taskforce to target criminals who are laundering tens of millions of dollars in Australia every day to bankroll lavish lifestyles and further crime.
Revealed today, Taskforce Avarus is the next targeted offensive against Australian and offshore organised criminals, who are laundering money through the nation’s financial system and property market at an alarming scale.
Recent investigations have exposed the extent of large-scale and systemic money laundering throughout Australia, with a high proportion driven by illicit drug trafficking.
It is believed billions of dollars are being laundered in Australia every year. Intelligence and investigations have revealed that:
- One Sydney criminal gang in 2022, on some days, was laundering $1 million every hour for three to five hours;
- On behalf of organised crime, students, foreign nationals and others are making multiple, significant illicit cash deposits in ATMs – going from one ATM to the next;
- Money mules are being flown throughout Australia to collect illicit money and then deposit it into ATMs;
- Safe houses across Australia are hiding illicit money – sometimes millions of dollars;
- Cash couriers have moved large amounts of illicit cash to “dead drop zones” in parks and bushland;
- Criminal syndicates are using baby formula, vitamins and high-end goods to launder money;
- Criminal syndicates are opening bank accounts in the names of law-abiding Australians to move money offshore; and;
- Illicit money is being used to invest in property, often further enriching organised crime.
Taskforce Avarus is using the firepower of the AFP, AUSTRAC, Australian Criminal Intelligence Commission and Australian Border Force to unravel the complex structures and methods criminals adopt to hide their illicit money.
With Commonwealth partners in the Taskforce, the AFP will also seek the participation of a number of public private relationships, including financial institutions that currently assist law enforcement to combat money laundering.
Working closely with private industry will make the sharing of information faster and increase bilateral capability.
Overseas law enforcement agencies, which have significant partnerships with the AFP, will also work closely with the Taskforce.
The AFP collaborates with its law enforcement counterparts to target money laundering organisations and assist with arrests offshore and possible court processes in Australia.
Additionally, the AFP participates in the Five Eyes Law Enforcement Group’s Money Laundering Community of Practice, which brings together senior law enforcement leaders and subject matter experts to share intelligence and cooperate on international operations.
Australia will host the next face-to-face meeting of the Communities of Practice in Sydney later this year.
The AFP’s investigative resources now dedicated to the Taskforce have executed 164 search warrants.
Forty-two people have been arrested, 66 charges laid, and criminal groups have been deprived of more than $250 million in cash and assets.
Overall in 2022, the AFP charged 74 people with 82 money laundering offences.
In the same year, the AFP-led Criminal Assets Confiscation Taskforce (CACT) obtained restraining orders over criminal assets, including real estate, cash, cryptocurrency, vehicles, jewellery and luxury items, with a combined value of about $160 million.
Operation Avarus-Midas last month alone resulted in the arrest of nine people in Australia and one person in Malaysia.
The AFP executed 13 premises search warrants across Sydney on 1 February, 2023. The CACT sought and obtained restraining orders in the Supreme Court of NSW over 20 properties, with all assets, including seized cash and luxury items totalling more than $200 million, including $30 million in cryptocurrency.
AFP Assistant Commissioner Eastern Command Stephen Dametto said money laundering undermined Australia’s national security, the economy and social security system.
“These money laundering syndicates being targeted by the taskforce are sophisticated, international groups with one purpose - to provide a shadow economy enabling crime,’’ Assistant Commissioner Dametto said.
"They exist only to launder money on behalf of organised crime and rely on the expertise of professionals, such as lawyers and accountants, to help them evade law enforcement.
“This dirty money that is laundered through our economy is not only bankrolling lavish lifestyles but also funding future crime, such as more illicit drug importations and weapons trafficking. Put simply, without the ability to launder their money, transnational serious organised crime ceases to function.
“While law-abiding Australians are earning an honest day’s living, paying their taxes or being good community citizens, organised crime gangs are using money gained illegally to increase their wealth.
“They are buying homes, commercial property, investing in our financial systems and living large without the financial pressures felt by ordinary Australians.”
AUSTRAC Deputy CEO Intelligence Dr John Moss said there was an inaccurate perception that money laundering was a victimless crime.
”It’s important to understand that money laundering is not something that just happens in movies. It is a real-world crime with real-world consequences, and not in some place far away, but right here in Australia, and in our communities,’’ Dr Moss said.
“Criminals engage in the activities which are the most lucrative, like trafficking in drugs or humans. So when criminals are cleaning the money made from these crimes, people shouldn’t lose sight of the child that was exploited, or the violence and deaths caused by the trafficking of illicit drugs.
“That’s why AUSTRAC is proud to be part of this taskforce and brings our strong partnership with the financial industry through the AUSTRAC-led Fintel Alliance, our deep expertise in Financial Intelligence and our regulatory powers to work with our law enforcement partners to hit transnational, serious and organised crime where it hurts.”
ABF Assistant Commissioner Erin Dale said the ABF is committed to whole of government priorities in combatting money laundering activities that are facilitated through, and impact the integrity of, Australia’s border.
“This taskforce allows the ABF to maintain a contemporary operational presence in the area of serious organised crime where there is an identified border nexus,” Assistant Commissioner Dale said.
“Multi-agency activities like AVARUS provide an important opportunity for law enforcement partners to leverage the ABF’s substantial capabilities.
“And so while the ABF will continue to fiercely protect the integrity of Australia’s border, Taskforce AVARUS will only serve to further enhance our capability to target activities driven by criminal syndicates,” she said.
Anyone with information about suspicious border activity or border-related crime the community can report it anytime through Border Watch at borderwatch.gov.au. Information can be provided anonymously.
ACIC Executive Director Intelligence Operations Jennifer Hurst said that the ACIC is committed to supporting its partners deliver on their functions as they relate to money laundering which is a key enabler for transnational serious organised crime.
“The vast majority of organised crime is motivated by profit. The ACIC is committed to working collaboratively with our partners to develop intelligence on money laundering to better inform operational responses and insights.”
WHY CRIMINALS MONEY LAUNDER AND HOW THEY DO IT
Money is the lifeblood of organised crime. The AFP has already had significant success in targeting the encrypted communications of organised crime, and now it will focus on eliminating its other key enabler.
Money launderers use many different methods to avoid detection by law enforcement agencies.
They can range from using pools of criminal cash held in different jurisdictions to off-setting one transaction against another, to purchasing cryptocurrency, property and gold, as well as recruiting everyday people to make cash deposits at multiple ATMs into multiple bank accounts.
Cryptocurrency is used by money launderers because it takes only seconds to create a crypto account (or address) with a crypto service provider, which is free of cost and provides a perceived level of anonymity.
Crypto ATMs, prepaid debit cards loaded with cryptocurrency or online gaming sites that accept cryptocurrency are some of the ways crypto is then used to hide illicit funds.
Example scenario of how dirty money is cleaned using cryptocurrency methods
- A money launderer has $5000 of illicit cash.
- The money launderer deposits the cash at a crypto ATM to a crypto address he or she opened earlier.
- The money launderer then sends the funds from crypto address (1) to another crypto address (2).
- Others connected to the money laundering organisation also send funds to crypto address (2), known as a crypto-mixer. The funds are now mixed together in one address.
- The funds are portioned out and sent to different addresses.
- This process is repeated multiple times with different crypto addresses and crypto-mixers until the funds reach their final destination e.g. organised crime group based offshore.
- It is now nearly impossible to trace the origins of the illicit funds.
How structuring in money laundering works
- Most financial institutions and some other service providers must submit a report to AUSTRAC when their customers engage in cash transactions of $10,000 or more.
- Money laundering syndicates seek to avoid triggering these reports by using one or more workers within the money laundering syndicate to, for example, deposit funds into bank accounts in lots of less than $10,000.
- This practice happens using both ATMs and in-branch deposits. However, recent changes to the way ATMs operate have made that mode of structuring more difficult.
How money laundering works, using daigous as an example
- An organised crime syndicate based offshore, sells their drugs through a local distributor in Australia.
- The drug distributor in Australia needs to launder the proceeds and get the money back to the syndicate heads offshore without attracting the attention of authorities.
- They reach out to a money laundering organisation, based offshore or in Australia, and negotiate a contract on how much is to be laundered. The money launderers then nominate a cash collector in Australia.
- The Australian drug distributors will nominate a syndicate member to meet the Australian cash collector working on behalf of the money laundering organisation. The syndicate member will hand over the cash to be laundered.
- The money laundering organisation will have a large supply of cash on hand, and will then release the money to the offshore syndicate, charging a commission.
- The cash collector in Australia then gets to work turning the illegal drug profits into legitimate cash or goods. This can be done by funnelling money through cash based businesses, such as daigous – legal businesses buying goods to send to another country. Daigou translates to "surrogate shopper.''
- The daigous hire community members to buy large amounts of baby formula, cosmetics, vitamins, designer shoes and handbags from pharmacies, supermarkets and department stores.
- The goods are then shipped overseas and re-sold, with the profits going back to the money laundering organisation.
Some criminals in Australia find it hard to transfer money out of offshore bank accounts because some foreign governments prevent large amounts of money leaving their country.
Often these criminals turn to money launderers, who use complex methods to facilitate payments.
Criminals often mix their illicit money with legitimately-earned cash, making it harder for law enforcement to identify or seize. Money laundering organisations are the equivalent of underground banks with branches all over the world.
The cash reserves these money laundering organisations hold – tens of millions of dollars – are often from the proceeds of illicit drug trafficking.
One typical example of money laundering is the following:
- A criminal syndicate in Australia needs to repay a debt owed to another organised crime group overseas, but it would attract the attention of law enforcement or regulators if a large amount of cash was transferred.
- The criminal syndicate in Australia turns to a money laundering organisation to repay the debt.
- The money laundering organisation gives its low-level syndicate members in Australia money to buy goods, such as baby formula, designer handbags or other wanted items. The goods are to the value that is owed to the crime group overseas.
- All the goods are transferred to one location in Australia and shipped overseas to a group, which then sells the goods and the money raised provided to the overseas organised crime group.
Money mule allegedly flown around Australia A woman allegedly flown around the country by money laundering controllers to deposit cash at ATMs was arrested at an airport in Australia last year. It is alleged the woman, on a student visa, had millions of dollars go through her accounts.
On multiple occasions, she allegedly picked up thousands of dollars cash from the controller of a money laundering syndicate, deposited it at an ATM, picked up more cash and deposited it at a different ATM.
Police suspect the money laundering organisation flew her around the country to deposit cash at different ATMs in an attempt to evade law enforcement detection.
The woman now faces a maximum penalty of 25 years’ imprisonment.
She is remanded in custody and due to appear in court on 29 March, 2023.
Gold dealer and wife allegedly move $22 million
The AFP charged a gold dealer and his wife in July 2022, after an investigation revealed the pair had allegedly moved more than $22 million through their bank accounts in an 18-month period.
The man is a registered precious metals dealer and director of a gold trading company.
It is alleged he failed to adhere to his reporting obligations on gold sales by providing his clients with anonymity when making large cash purchases.
The AFP executed a search warrant on their Lakemba home and found gold bullion hidden in the man’s underwear drawer.
Officers seized about $86,000 cash and $148,000 worth of gold bullion of various sizes as well as business documents and cash deposit receipts.
The man and woman are next in Parramatta Local Court on 24 March, 2023.
Gold bullion is one method money laundering organisations use to hide the source of their illicit funds from law enforcement; similar to purchasing luxury watches and jewellery.
It is another form of money transfer where organised criminals can trade it or pack it in their luggage, take it offshore and sell it for cash.
Alleged rigged up cash houses
Through Operation Ironside intelligence, the AFP identified a person suspected to be the controller of a Vietnamese money laundering organisation.
The AFP suspected the money laundering activities to be occurring at a NSW property.
Investigations led to two units at a Western Sydney building complex that were allegedly being used as cash houses to hide illicit funds.
The units had reinforced doors and windows with trip wires set to active CCTV cameras when someone attempted to enter.
The AFP seized about $2.6 million cash from the units. The AFP arrested one woman in January 2022 in connection to the cash houses and charged her with a proceeds of general crime offence.
This offence has a maximum penalty of 25 years’ imprisonment.
The woman is scheduled to next appear in Downing Centre Local Court on 24 April, 2023.
Criminal investigators subsequently partnered with the AFP-led Criminal Assets Confiscation Taskforce (CACT) and further financial investigation established that the assets were grossly disproportionate to declared incomes.
On 30 June 2022, within a short period from the original seizure of the $2.6 million cash by the AFP’s money laundering teams, the CACT obtained restraining orders in the NSW Supreme Court over the seized cash, as well as 13 real properties.
The current estimated gross value of all restrained property is more than $23 million.
Hidden compartments in car to allegedly transport drugs and cash
The AFP charged an alleged member of a group of drug dealers and money launderers who were transporting drugs and cash around Sydney.
The AFP executed multiple search warrants across Sydney and seized $250,000 cash and 8kg of cocaine and methamphetamine.
The AFP also seized the man’s vehicle, which allegedly had multiple hidden compartments containing cash and drugs.
The man was arrested in October 2022 and charged with drugs and proceeds of crime offences.
He is scheduled to next appear in Sutherland Court on 3 May, 2023.
Alleged industrial-scale daigou operation
The AFP dismantled an alleged industrial-scale daigou operation where, on a daily basis, cash hidden in boxes labelled baby formula would arrive at a commercial warehouse, the cash would be deposited at ATMs and the money would be used to purchase actual baby formula to be sold for a high price in China.
The organiser in China would monitor the cash counting live through CCTV cameras stationed in the office of the warehouse.
The controller in Sydney would allegedly open each box and count the cash with the CCTV camera positioned over his shoulder.
The AFP executed a search warrant in April 2022 at the warehouse and seized about $300,000 cash. Investigators suspect the money laundering organisation moved about $14.5 million in a one year period.
One man was arrested in April 2022 and charged with proceeds of crime offences.
He is scheduled to next appear in Parramatta District Court on 17 March, 2023.
NSW and Victoria
Alleged Vietnamese-controlled money laundering organisation dismantled – Wardrobe changes, bribery charges and attempts to escape the country.
The AFP charged six alleged members of a money laundering organisation for allegedly operating for a number of years in Sydney and Melbourne.
It is alleged the organisation, based in Vietnam, used multiple money mules to pick up cash and deposit it at ATMs around Sydney and Melbourne.
Investigators allege a money mule in Sydney regularly changed her appearance in an attempt to disguise her identity for the ATM cameras when depositing cash.
She would allegedly change her clothes, put on a wig and sunglasses, but always wore her signature red sneakers.
The woman is scheduled to be next in Downing Centre Local Court on 21 March, 2023.
The activities of a husband and wife money mule duo allegedly working for this money laundering organisation in Melbourne came to police attention.
The duo was arrested at Melbourne Airport in October 2022 when attempting to leave the country.
The couple is scheduled to be next appear in Melbourne Magistrates Court on 10 May, 2023.
After five alleged money mules linked to the money laundering organisation were charged by the AFP, the Vietnam-based coordinator allegedly came to Sydney to check what was happening.
He was arrested on arrival. He allegedly tried to bribe AFP officers with $20,000 cash to release him.
He allegedly made the offer twice. In addition to being charged with proceeds of crime offences, he was also charged with two counts of attempted bribery.
The AFP suspects the money laundering organisation moved $25 million over a two year period.
He is scheduled to next appear in Downing Centre Local Court on 29 March, 2023.
Money laundered through gaming venue
The AFP charged three alleged members of the money laundering syndicate in Melbourne in September 2022.
The syndicate allegedly laundered millions of dollars in illicit cash through a Springvale licensed gaming venue by buying jackpots from patrons.
The jackpots were then paid out by the venue as cheques which would later be deposited into bank accounts, and promptly withdrawn as cash. Investigations revealed that between November 2021 and June 2022, about 73 per cent of the cheques issued at the gaming venue – valued at more than $4.7 million – were issued to patrons linked to the syndicate.
Investigations are continuing in relation to the source of the funds.
The three people are scheduled to next appear in Melbourne Magistrates Court on 8 May, 2023.
Consultant allegedly launders money through his clients fraudulently opened bank accounts.
Cash hidden within safes stored inside staircase.
The AFP charged two Queensland men in October 2022 for their alleged involvement in a money laundering syndicate responsible for laundering $4.5 million dollars in cash.
A Helensvale man and a Graceville man were charged with conspiring to deal in the proceeds of general crime and at the time of dealing, the value of the money or property was $1,000,000 or more. It will be alleged the Helensvale man used personal information from clients to his consultancy business to open fraudulent bank accounts.
The accounts were opened in the name of some of his clients believed to be without their knowledge.
The Graceville man allegedly supplied millions of dollars of funds that is the suspected proceeds of crime to be deposited into the accounts in an effort to avoid detection by authorities.
The AFP also seized a cash counter and $70,000 cash from two safes that were hidden within the staircase at a Bardon premises.
A further $160,000 cash was seized from a safe at the home of the Helensvale man.
The Graceville man is scheduled to next appear in Brisbane Magistrates Court on 17 March, 2023, while the Helensvale man is scheduled to next appear in Southport Magistrates Court on 15 May, 2023.
Cash allegedly moved to dead drop zones
The AFP arrested an alleged cash courier and seized up to $5 million dollars in suspected illicit cash in Perth in December 2022.
It is alleged the man was acting as a cash courier for a criminal syndicate and was moving large amounts of money, believed to be the proceeds of crime, to dead drop zones in parks and bushland across Perth.
The AFP executed a search warrant at his Alexander Heights home and seized up to $5 million cash, hidden in a suitcase and duffle bags.
The man is scheduled to next appear in Perth Magistrates Court on 27 April, 2023.
Almost $1 million cash seized from car boot
The AFP seized $998,850 in cash from a car boot and charged a West Australian man with dealing in the proceeds of crime, as part of an investigation into alleged money laundering in October 2022.
It will be alleged the man was linked to local criminal groups attempting to launder large amounts of cash generated from the proceeds of crime.
He was arrested at a car park in the coastal suburb of City Beach, as he was allegedly in the process of laundering the cash. He is scheduled to next appear in Perth Magistrates Court on 24 March, 2023.
$4 million in assets forfeited in international money laundering investigation
The AFP-led CACT began an investigation in 2020 after receiving intelligence from AUSTRAC which identified suspicious account activity and large funds transfers between bank accounts in WA and Thailand.
A joint investigation was subsequently established between the AFP and Royal Thai Police, pursuant to existing cooperative arrangements to combat transnational crime, including money laundering and serious fraud.
Each of the bank accounts were allegedly linked to a man based in WA, although the bank accounts were held variously in the names of companies or other individuals, including a relative and business associate of the man.
The investigation identified the balances of the accounts appeared grossly disproportionate to relevant personal and business income which had been declared to the Australian Taxation Office (ATO).
The CACT commenced court proceedings, on the basis that the man was suspected of dealing in the proceeds of crime, as well as failing to make proper declarations to the ATO.
Following an extensive investigation, the WA Supreme Court ordered that about $4 million in assets, including funds in bank accounts, and an apartment in Perth, were to be forfeited.
$12 million in assets restrained including eight ACT properties
Operation Nairana began in late 2020 when the FBI and the US Internal Revenue Service (IRS), as part of the Joint Chiefs of Global Tax Enforcement (J5), reported an Australian-based person was allegedly using crypto-currency to launder money.
The AFP charged a Canberra man with dealing with property reasonably suspected of being proceeds of crime in July 2022.
It is alleged the man used sophisticated transactions to launder cash and cryptocurrency from the sale of stolen personal identification information and illegal goods, as well as the proceeds from fraudulent scams and illegal online gambling.
The AFP will further allege the man had accumulated a significant number of assets that were suspected to be the proceeds of crime, including eight properties, four luxury cars worth more than $800,000, 28 bank accounts and approximately $600,000 in cryptocurrency.
The AFP-led CACT obtained restraining orders in the ACT Supreme Court over more than $12 million dollars in assets – including eight ACT properties, four high-end vehicles, luxury goods, cash and cryptocurrencies – amid the international money laundering investigation.
The man is scheduled to next appear in ACT Magistrates Court on the 17 April, 2023.
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